Thursday, August 13, 2009

Scrap Cap-and-Trade: Emissions-Trading Inventors Now Leery

For folks who follow this stuff (and the 300 million who will foot the bill) this is an important news day.As an adjunct to the post immediately below, "Goldman Faces Carbon Market Curbs in Senate Proposals (GS; JPM)" which was sourced from Bloomberg, we have this from the Wall Street Journal via their Environmental Capital blog:

You know cap-and-trade faces headwinds when the people who invented the idea speak out against it.

Today’s Wall Street Journal has an article on the economists who first dreamed up a way to tackle pollution by using the market—capping pollutants and letting firms trade permits for pollution rights.

That work eventually led to emissions-trading programs such as acid rain, that have consistently been held up as an example for the current cap-and-trade plan to curb greenhouse-gas emissions. (Here’s a nice history of emissions-trading ideas.)

One of those economists, Thomas Crocker, doesn’t think cap-and-trade is the best way to tackle global warming—and not for all the economic reasons that push so many folks into the “carbon tax” camp. It’s a question of effectiveness. From the WSJ:

Mr. Crocker sees two modern-day problems in using a cap-and-trade system to address the global greenhouse-gas issue. The first is that carbon emissions are a global problem with myriad sources. Cap-and-trade, he says, is better suited for discrete, local pollution problems. “It is not clear to me how you would enforce a permit system internationally,” he says. “There are no institutions right now that have that power.”>>>MORE

This one-two from competing news organizations is probably a good reason to keep them around. Let's hear it:

"Two, Four, Six, Eight...something, something...Fourth Estate"

(The chant I proposed for picketing Dow Jones employees in '07. They didn't use it. Nor the one that ended "Basal Metabolic Rate". Go figure)